By Rebecca Melvin
New York, June 19 - Weyerhaeuser Co. priced an upsized $600 million of mandatory convertible preferred shares at par of $50.00 and with a 6.375% dividend and 20% initial conversion premium, according to a prospectus.
The mandatories were initially talked at $500 million in size. Pricing came at the rich end of talk, which was for a 6.375% to 6.875% dividend and 15% to 20% premium.
The registered, off-the-shelf deal has a $90 million greenshoe, which was upsized from $75 million.
Weyerhaeuser also priced about $804.75 million of common shares, or 29 million shares at $27.75 per share. The price represented at 1.7% discount from the $28.24 closing price of shares on the New York Stock Exchange on June 18.
Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. were the joint bookrunning managers of both offerings.
The series A preferreds have dividend protection at a quarterly dividend threshold of $0.22 and have cash takeover protection. They will automatically convert into a variable number of shares on July 1, 2016.
Proceeds will be used to finance the company's previously announced acquisition of Longview Timber LLC and for debt repayment.
Weyerhaeuser is a timber company based in Federal Way, Wash.
| Issuer: | Weyerhaeuser Co.
|
| Issue: | Mandatory convertible preferred shares
|
| Amount: | $600 million, upsized from $500 million
|
| Greenshoe: | $90 million, upsized from $75 million
|
| Maturity: | July 1, 2016
|
| Concurrent offering: | $804.75 million, or 29 million shares at $27.75each
|
| Dividend: | 6.375%
|
| Price: | $50.00
|
| Yield: | 6.375%
|
| Initial conversion premium: | 20%
|
| Threshold appreciation price: | $33.30
|
| Minimum settlement rate: | 1.5015
|
| Maximum settlement rate: | 1.8018
|
| Bookrunners: | Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc.
|
| Senior co-managers: | Allen & Co. LLC, J.P. Morgan Securities LLC
|
| Junior co-managers: | Goldman Sachs & Co., BofA Merrill Lynch, Mitsubishi UFJ Securities (USA) Inc., PNC Capital Markets LLC, Wells Fargo Securities LLC
|
| Price talk: | 6.375%-6.875%, up 15%-20%
|
| Trade date: | June 19
|
| Settlement date: | June 24
|
| Listing: | NYSE: WY
|
| Stock reference price: | $27.75 per share
|
| Market capitalization: | $15.2 billion
|
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